Rules shouldn't be 'too harsh' on the real estate sector, experts say
The Shanghai municipal government might shortly roll out a basket of real estate policies to curb the city's overheating property market, domestic media reported on Thursday.
The policies will include tightening of the standards for first-time homebuyers, raising the purchasing restriction threshold for buyers without local household registration (hukou) and increasing the down payment ratio for certain second-time buyers, domestic finance news website caixin.com reported.
The policies might be announced during a press conference by the Shanghai municipal government on Friday, the Securities Times newspaper reported on Thursday.
The reports follow a recent surge of housing prices in Shanghai.
The price of Shanghai's new commercial housing units in February rose 2.9 percent from the previous month, the fastest growth rate among domestic cities, according to a statement by the National Bureau of Statistics on March 18.
Xue Jianxiong, a real estate commentator, told the Global Times on Thursday that it's the Chinese government's "mission" to resolve the problem of excess housing stock on a nationwide level.
As a result, Xue said, it's unlikely that Shanghai will roll out a basket of policies all at once in an effort to control the property market.
"Only one or two policies are likely to come out in the short term," he said.
According to Xue, the Shanghai municipal government is very likely to tighten the standards for second-home purchases.
Under the current rules, anyone in Shanghai who already owns a home anywhere in China - if the mortgage has been fully repaid - is classified as a first-time buyer if they purchase another unit, caixin.com reported.
Zhang Yanbing, a Shanghai-based real estate agent, told the Global Times on Thursday that he has seen many cases of non-local clients, who own several houses near their places of birth, still qualify as first-time buyers in terms of the down payment ratio for their house in Shanghai.
But under the new requirement, the definition of "first home" must meet the condition that the buyer has never owned any housing unit.
"This policy will increase the pressure on those who are trading up … I think the government will launch this policy to cool down the surging market for high-end properties in Shanghai," Xue said.
According to Caixin, the Shanghai municipal government will also raise the minimum down payment ratio for second homes of at least 140 square meters to 70 percent from the current 60 percent standard.
